Stratasys acquires Makerbot, joining 3D printing’s old guard with its hottest startup

Stratasys Ltd., one of the largest companies in the 3D printing and additive manufacturing industry, has acquired MakerBot, a manufacturer of desktop 3D printing equipment, for $403 million.

MakerBot, founded in 2009, helped develop the desktop 3D printing market, and according to information released by Stratasys, has built the largest installed base of 3D printers in the category by making 3D printers highly accessible. The company has sold more than 22,000 3D printers since 2009, and in the last nine months, the MakerBot Replicator 2 Desktop 3D Printer accounted for 11,000 of those sales, said the Stratasys release.

Terms of the acquisition call for Stratasys to initially issue approximately 4.76 million shares in exchange for 100% of the outstanding capital stock of MakerBot. Stratasys intends for MakerBot to operate as a separate subsidiary, preserving its existing brand, management, as well as the spirit of collaboration is has built with users and partners.

The acquisition will enable Stratasys to offer affordable desktop 3D printers together with a seamless user experience. "MakerBot's 3D printers are rapidly being adopted by CAD-trained designers and engineers, said David Reis, Stratasys CEO.

Bre Pettis, CEO and co-founder of MakerBot, headquartered in Rehovot, Israel, will continue to lead the company. In a press conference on June 20, Pettis noted that his goal in founding MakerBot was to give access to 3D printing to everyone. "The last couple of years have been incredibly inspiring and exciting," Pettis said in the release. "We have an aggressive model for growth, and partnering with Stratasys will allow us to supercharge our mission to empower individuals to make things using a MakerBot, and allow us to being 3D technology to more people. I am excited about the opportunities this combination will bring to our current and future customers."

In commentary on this acquisition, Blake Bos, Consumer Goods/Industrials analyst at Motley Fool, noted that this is "a huge win for Stratasys." 3D Systems' Cube Printer is competitor of MakerBot, however Bos stated in video commentary that the "consumer printer" market "might not be as important as the professional line of printers going forward." And, he added, both Stratasys and 3D Systems "largely depend on their professional lines" of 3D printers for their revenues. "I don't know how profitable the consumer sector is right now," Bos said.

Stratasys and MakerBot estimate that between 35,000 and 40,000 desktop 3D printers were sold in 2012, and that number is estimated to double in 2013. Stratasys' revenue more than doubled to $97.2 million in the first quarter through March 2013, from $45 million a year ago. MakerBot had first-quarter revenue of $11.5 million compared to $15.7 million for all of 2012.

This is the second major acquisition for Stratasys in less than a year, having bought Israeli competitor Objet in December.

Confidence is strong in the 3D printing industry, and one recently released report from independent market research firm IDTechEx found that the 3D printing market did "an impressive billion dollars in business in 2012," and that by 2025 it could reach four billion in total sales. In the study, titled "3D Printing 2013-2025: Technologies, Markets, Players," IDTechEx notes that 3D printing growth has been driven primarily by awareness of the technology and its capabilities.

The downsides to growth include the "narrow geography" of the technology-mainly the United State and Europe and the fact that prices for 3D printers over time have remained high-particularly those high-end industrial-grade printers, which the report notes are as expensive today as they were 10 years ago. However, the bright side-and one in which Stratasys and 3D Systems might be looking at-is that low-end, consumer-grade 3D printers have dropped in price thus opening up the market to more desktop projects.